Australian Dollar (AUD) Trends down Overall on Poor Consumer Confidence
The Australian Dollar (AUD) fell against the majority of its peers yesterday following a downbeat consumer confidence release. The Westpac index for the month of October printed at 104.6 as opposed to the 108 expected.
Worries over Australia’s long-term economic outlook overshadowed relief from the loosening of Covid-19 restrictions, as survey respondents were cautious that inter-state travel could result in more coronavirus infections.
Looking ahead, a clutch of jobs data may weigh upon AUD sentiment today, with unemployment expected to have risen to 4.8% in September.
Pound (GBP) Firms as GDP Data Largely Optimistic
The Pound (GBP) rose on Wednesday’s session as GDP data for the month of August revealed economic growth rose 0.4% in August. Despite missing expectations of a 0.5% expansion, the release has been widely regarded as positive.
The reopening of the economy is undoubtedly behind August’s growth, as a major boost occurred in the tourism and leisure sector with UK holidaymakers spending the summer season closer to home. August was also the first full month of no Covid restrictions.
Also supporting the Pound is news that UK supply chain pressures are easing: Oliver Dowden, the Conservative party co-chair, told reporters that the backlog of containers at Felixstowe port is improving as congestion subsides. If supply pressures continue to ease, GBP may make further gains.
Euro (EUR) Sinks on ECB’s Ongoing Dovish Stance
The Euro (EUR) traded in a mixed range yesterday, as dovish signals from the European Central Bank (ECB) suppressed trading sentiment.
Earlier in the week, ECB policymaker Francois Villeroy de Galhau said that there is a risk of Europe falling short of its 2023 inflation target rather than exceeding it, adding that ending the bank’s Pandemic Emergency Purchasing Programme (PEPP) would not mean the end of its accommodative monetary policy.
Looking ahead, a clutch of US data may affect trading in the single currency, as a result of the strong negative correlation between EUR and the US Dollar (USD).
US Dollar (USD) Falls as Core Inflation Meets Expectations
The US Dollar enjoyed brief tailwinds yesterday as data revealed domestic inflation unexpectedly accelerated in September. Increasing inflation supports the Federal Reserve’s intention to taper bond purchases next month.
However, core inflation remained the same as last month, indicating that underlying price growth may have peaked.
If Friday’s retail sales miss expectations, a loss of momentum in the US economy will become more apparent. Meanwhile, further employment data this evening may boost USD sentiment, if initial jobless claims fall as forecast.
Canadian Dollar (CAD) Slides as WTI Crude Depreciates
The Canadian Dollar (CAD) fell on Wednesday’s session as the price of WTI crude oil dropped from multi-year highs.
The tumble in cost came as Iraq’s oil minister affirmed that oil prices were unlikely to rise further and the Organization of the Petroleum Exporting Countries (OPEC) announced that it had lowered the 2021 oil demand growth forecast.
New Zealand Dollar (NZD) Wavers as Business Confidence Softens
The New Zealand Dollar (NZD) edged down against several peers yesterday following a lower-than-expected business confidence score. The ANZ business confidence preliminary for October fell to -8.6, below last month’s -7.2.
Data Releases
Oct 14th 08:00 AUD RBA Debelle Speech N/A
Oct 14th 10:00 USD Fed Bowman Speech N/A
Oct 14th 10:30 AUD Unemployment Rate (Sep) 4.8%
Oct 14th 10:30 AUD Employment Change (Sep) -137.5K
Oct 14th 17:00 EUR ECB Enria Speech N/A
Oct 14th 20:05 EUR ECB Elderson Speech N/A
Oct 14th 20:10 GBP BoE Tenreyro Speech N/A
Oct 14th 22:30 USD Initial Jobless Claims (Oct) 319K
Oct 14th 22:30 USD PPI (Sep) 0.6%
Oct 15th 00:00 USD Fed Bostic Speech N/A
Oct 15th 03:00 USD Fed Barkin Speech N/A
Oct 15th 03:00 USD Fed Williams Speech N/A